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The TaiwanICDF Cooperates with Inter-American Development Bank to Assist Microfinance Institutions in Latin American Countries in Adopting Digital Finance (Fintech) for Business Sustainability

The TaiwanICDF Cooperates with Inter-American Development Bank to Assist Microfinance Institutions in Latin American Countries in Adopting Digital Finance (Fintech) for Business Sustainability

The TaiwanICDF co-invested with Inter-American Development Bank (IDB) Lab in the Próspero Microfinanzas Fund (Fund) to assist younger and smaller microfinance institutions (MFIs) in Taiwan’s diplomatic allies or friendly countries in the Latin America and Caribbean region (LAC) seek their first outside investors and commence the complicated process of converting into shareholder institutions by filling the equity gap. The Fund also adopted financial technology (Fintech)/ digital financial services to help LAC countries promote social impact projects.

In addition to pursuing profit or increasing market share, financial institutions now have further implemented the concept of social impact to a sustainable business model syndicating finance, governance, and environmental and social initiatives. The Fund puts this model into practice and provides nine MFIs in six LAC countries including Honduras and Nicaragua with financing, a traditional development approach, as well as Fintech, an emerging approach. This business model has become a good solution to manage their businesses. To enhance the sustainable development of these MFIs, the Fund guided them to implement the concept of social impact into their core businesses. To do so, these nine MFIs improved their work efficiency including strengthening their internal governance, establishing a sound financial environment for customers, crossover collaboration and resources concatenation, and customized financial services for vulnerable groups.

For instance, Organizacion de Desarrollo Empresarial Femenino (ODEF) is a leader in the Honduran microfinance industry and provides financial services to 40,000 clients. ODEF has an important concentration in the agriculture sector and the seasonality of the corps affects the repayments. Through the Fund’s financing and technical assistance, ODEF developed digital tools to help its customers analyze weather, pests and diseases of major crops, and other risk mitigation. These tools help clients respond quickly to weather and other conditions, resulting in an increase in productivity that improves payment abilities. Additionally, ODEF also strengthened its weak areas such as commercial area productivity, arrears management, and governance.

The portfolio of these nine MFIs in aggregate reached 300,000 new clients since 2015 and created over 2,000 job opportunities. The female beneficiaries are near 50 percent of the total beneficiaries. The Fund was recognized as a top-50 fund in 2016 for its Impact Business Model and included in the 2017 Best for the World list.

In recent years, the TaiwanICDF has cooperated with the international community to assist our partner countries to move towards sustainable development, as well as adopted science, technology, and innovation as comprehensive tools to promote partnerships with influential international mechanisms or communities. In addition to the aforementioned financial development sector, the TaiwanICDF also collaborates with partners in agriculture, environment, public health, and other sectors.

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  • Date:2020/8/13